Digital grids: Building a resilient platform for the future of electricity delivery

The electric grid is undergoing one of the most profound transformations in its 140-year history. What was once a physical, centrally managed infrastructure is rapidly becoming a more digital, distributed and cyber-dependent network. 

What is driving this revolution? The growth in distributed energy resources (DERs), non-dispatchable renewable resources, and energy storage are all forcing a dramatic rethink of how we generate, transmit and distribute electricity. Data centers, artificial intelligence and electric vehicles place additional pressure on legacy infrastructures.

As a result, we’re starting to see the convergence and scaling of Operational Technology (OT) and Information Technology (IT) across all layers of electric grid operations and management, especially at the grid edge. This is where generation, storage and consumption interact in the form of distributed energy resources (DER), EVs, smart meters, and battery energy storage systems (BESS). 

Here, the need for additional computational capabilities includes faster communication, greater bandwidth, and more robust analytics and intelligence to operate and manage the grid in real-time. 

The digital grid: robust, resilient, secure

The revolution is already here. As the grid becomes more digital and decentralized, the traditional divisions between generation, transmission and distribution are no longer sustainable. To build a resilient, fully interoperable grid, utilities must adopt distributed architectures that enable seamless data and control flow from generation to the customer. 

This is where digital grids excel. Encompassing public and private infrastructure and communications systems, they are essential for managing, protecting, routing and controlling data flows between cyber assets. Although definitions vary, it is safe to say that most digital grids comprise the following elements: 

• Robust communications infrastructure: Public, private or hybrid communications are essential for reliable and scalable connectivity across assets.
• Integrated control and edge computing: Centralized control must be paired with edge computing capabilities to ensure responsiveness and autonomy at the grid edge.
• Near real-time data processing: The ability to process network data in near real-time is crucial for optimizing system performance and customer outcomes.
• Comprehensive cybersecurity: Effective cybersecurity protects both physical assets and digital systems across the entire grid.

Why use a digital grid framework?

The good news is that the foundations already exist in the form of grid standards and governance bodies, including the National Institute of Standards and Technology (NIST), the Common Information Model (CIM), and the US Department of Energy: 

• NIST sets technical standards that ensure smart grid technologies work together safely and reliably. 
• The CIM, developed by the International Electrotechnical Commission (IEC), defines a shared data structure that allows different systems across the grid to exchange information consistently.
• The Department of Energy drives large-scale innovation through funding, research, and national policy and has established frameworks for how to modernize the grid, integrate renewables, and scale technologies such as BESS and EV charging. 

Together, these three resources provide technical, structural and financial guidance that enable organizations to develop a digital grid with the following critical features:  

1. Comprehensive end-to-end management, resiliency and reliability: Digital grids provide a unified view of complex digital infrastructures, enabling utilities to classify assets based on their functional contribution and enabling the management, monitoring and adaptive control of the electric grid in real-time. This approach relies on technology planning, investment and management, leading to greater situational awareness and improved asset management capabilities.¹
2. End-to-end security focus: With the electric grid becoming increasingly cyber-dependent and a prime target for cyberattacks, digital grids support proactive cybersecurity strategies that mitigate risks. They address vulnerabilities created when layering advanced digital capabilities onto decades-old Operational Technology (OT) systems. Digital grids also support the implementation of robust security architectures, network segmentation and zero-trust solutions across the entire digital grid, from the grid edge to head-end systems.²
3. Information lifecycle management: Establishing a robust information lifecycle management (ILM) strategy is imperative at a time when inadequate data governance can result in significant financial, operational and reputational harm. An ILM framework, supported by strong governance and clear policies, is critical for preventing data leaks and security breaches across every stage of the data lifecycle, from creation to disposal. This includes defining data classification, securing data at rest and in transit with encryption, and strengthening access controls.³ As firms introduce new AI technologies to further optimize operational and maintenance costs, a robust ILM strategy will help provide the structured data necessary to deploy AI and improve decision making. 

A strategic imperative

Given all these advantages, the digital grid is no longer an option – it is a necessity. As power networks become more decentralized and dynamic, their digital counterparts must be deliberately designed to match, supporting a cohesive and secure solution built for longevity. 

Data centers, communications infrastructure and edge computing can no longer be treated as separate or secondary concerns. They must be planned with the same strategic foresight as physical grid assets. In short, a robust digital grid is not simply a tool for modernization, it is the means by which modernization will be achieved.

Capco's deep industry expertise and cutting-edge technology align with this strategic imperative, providing a robust framework for modernizing electric grid operations and management. We partner with utilities to design and implement scalable digital grid strategies that deliver long-term value, helping clients navigate the evolving energy landscape and pursue strategies for expansion and leadership.

References

¹ https://www.capco.com/intelligence/capco-intelligence/powering-the-future-of-us-energy-grids 
² https://www.capco.com/intelligence/capco-intelligence/modernizing-cybersecurity-in-utilities 
³ https://www.capco.com/intelligence/capco-intelligence/establishing-information-lifecycle-management-for-utilities